European Commission said on Wednesday that it expects the unemployment in the Eurozone to rise to 9.6% in 2020 from 7.5% last year. It estimates that the unemployment will fall to 8.6% in 2021. Commission also noted investments in Eurozone will plunge by 13.3% in 2020 after it rose 5.7% last year. However, rebound is expected to happen in 2021 by 10.2%.
In its Economic Forecast document, Economic and Financial Affairs Director General Marteen Verwey wrote that in the current quarter economic output in the EU is set to be almost 16% lower than in the last quarter of 2019. Although activity is expected to pick up again with the just-initiated, gradual easing of containment measures, the contraction in European Union GDP this year is expected to be 7.5%, that is more than during the financial crisis in 2009.
Verwey added that the shortfall of investment compared to the autumn forecast, estimated at around €850 billion in 2020 and 2021, and the drop in employment will reduce the economy’s production potential, preventing a return to the previous trajectory of output.
